Transatlantic Free-Trade Agreement: More than just corn and foie gras?

July 01 2013

The Transatlantic Trade and Investment Partnership would create the largest free-trade area in the world, comprising two powers that together account for 40% of global trade and GDP.

Import tariffs are not the main issue, given the reduced customs duties on either side of the Atlantic with the exception of a few protected sectors (agribusiness, clothing-textiles). For the agreement to be effective, non-tariff barriers (NTBs) above all need to be lowered, in particular in industry, as it is already being planned in the automotive sector.

Although the agreement must be comprehensive, negotiations, which could get underway from the summer of 2013, look set to be delicate in light of (i) macroeconomic and competitiveness differentials in favor

of the United States, and (ii) a number of sticking points, most often from the EU side.

In the most ambitious scenarios, the free-trade agreement could not only provide up to USD 270 billion in additional trade per year out to 2027 but, as well as boosting growth, could also establish a new global standard for norms and regulations.